Some Good News for a change!!
http://www.toledobiz.com/news1.htm
Supplier Recruitment Program aimed
at winning new investment and jobs
The June 13th issue of The Wall Street Journal ran a front-page story titled, Stung by Soaring Transport Costs, Factories Bring Jobs Home Again. The article reviewed the issue of rising fuel costs and actions being taken by US manufacturers to bring production facilities back to this country and freeze plans to send even more work overseas.
Northwest Ohio and southeast Michigan have seen production facilities close and jobs transferred to foreign operations for more than a decade. Rising fuel costs are causing manufacturers around the region to reassess plans for moving future production offshore. The drastic change in transportation costs is also causing many area manufacturers to examine current Suppliers and their inbound logistics costs.
Another factor is also impacting the supply chain at companies across the region. Many area production facilities have implemented lean manufacturing programs. As part of an effort to reduce operating costs, manufacturers throughout the region have put programs in place to lower inventory levels. Some have moved to just-in-time (JIT) operating approaches for inbound materials. Others are studying partial JIT operations in order to reduce inventory-carrying costs. With the drastic increases in transportation costs during the past six months and a need to minimize inventory levels, many area manufacturers are examining parts and material suppliers and options for improving inbound logistics and inventory management.
Rising fuel costs are offering a new opportunity that may have a positive impact on northwest Ohio and southeast Michigan. As manufacturers across the Midwest reassess their supply chains to address soaring transportation costs and the need to lower inventory levels, some parts and materials Suppliers will reposition production and warehousing operations.
Area economic development officials have recently launched the Supplier Recruitment Program (SRP). One of the elements of the program works with area companies that want to lower their inbound logistics costs and inventory carrying costs by recruiting Suppliers to locate in close proximity. The program is also an economic development lead generation effort to obtain the assistance of professionals at businesses around the region in learning about Suppliers and Customers and area companies that may have a need for a new facility. Such information provided to economic development officials can be used to win new manufacturing, warehousing, distribution, office space, and other facilities that are considering a Midwest location. The program also uses the assistance of companies located in the region to help recruit a Supplier or Customer that may be considering a new facility investment.
The Supplier Recruitment Program has been launched by three economic development partners that include Northwest Ohio Regional Economic Development Association (NORED), Regional Growth Partnership (RGP), and the Toledo-Lucas County Port Authority. Other partners for the program include the Toledo Chapter of the National Association of Purchasing Managers (NAPM), the area chapter of the Association for Operations Management (APICS), and EPIC, an organization of young professionals of the Toledo Regional Chamber of Commerce.
“There are significant changes taking place in the market today. We have a group of major Suppliers and Customers who we will monitor for new facility needs to assist the Supplier Recruitment Program. The timing is right for this economic development effort and we are interested in supporting this program,” stated Linda Hollington, president, Hollaytek, Inc., a manufacturing company located in Williams County.
“Rising fuel costs are impacting everyone’s operations. Many companies are examining their supply chains and assessing new options. We have a large base of Suppliers and are interested in participating in and supporting the Supplier Recruitment Program,” added Mike Bunge, a supply chain manager at Libbey, Inc. in Toledo. Senior management at the company signed the Supplier Recruitment Program’s Plan to Participate sheet offering to involve Libbey in this program to win new investment and jobs for the area.
The July 13th Wall Street Journal article provided additional insight into the changes taking place in offshore sourcing and China in particular. In addition to the transportation increases, other costs of doing business in the Far East are also on the rise. Chinese workers are demanding higher wages, tougher environmental and other controls are beginning to be enforced, and Chinese currency has risen versus the dollar. These factors – along with the drastic increases in transportation costs – are combining to force manufacturers to reassess their supply chain strategies involving both offshore sourcing and domestic Suppliers in the US.
The Wall Street Journal article stated:
Bremen Castings Inc., a family-owned foundry in Bremen, Indiana, is seeing a wave of customers bring work back from China and other low-cost countries.
Last month, a pump manufacturer, which had moved over $1 million worth of metal-casting work from Bremen to China two years ago, called “to reactivate everything,” stated J.B. Brown, the foundry president. “They told me the cost of transport from overseas was the straw that broke the camel’s back – and they said they didn’t see it going back down any time soon.”
Crown Battery Manufacturing Company in Fremont, Ohio is an example of an area company that has been forced to reassess its supply chain strategy as a result of soaring fuel costs. The company closed a manufacturing plant that it purchased in Reynosa, Mexico and moved operations back to the Fremont facility. The significant increase in transportation costs and quality control issues were the primary factors that drove the company’s decision. Approximately 25 new jobs have been added to the workforce at Crown Battery’s northwest Ohio location as a result of this change in the business’s supply chain plans.
The success of the Supplier Recruitment Program is dependent on participation from business professionals in the area, according to Mark V’Soske, president of the Toledo Regional Chamber of Commerce. He stated, “We have an important opportunity to create new investment which will improve the economy in our area.”
Doug Pontsler, vice president of global sourcing at Owens Corning, advised his staff that recruiting Suppliers to locate in closer proximity to the company’s facilities was a strategic initiative that could have an important impact on the corporation’s profitability. He sent an email to all supply chain (purchasing) personnel at the company stating, “This [Supplier Recruitment Program] provides opportunity for each of us to assist in the economic growth of our region! Please share this with your teams and keep your ears open.”
Companies are being asked to display the SRP Wanted Poster at their businesses to help remind employees and visitors to submit project leads when they learn this information.
Information about participation in the Supplier Recruitment Program can be obtained at www.toledobiz.com. Companies can complete the Plan to Participate sheet and obtain the SRP Wanted Posters for display at this website. Additional information is available at the Regional Growth Partnership and at a number of participating local economic development organizations.
